Daily Archives: October 3, 2014

Family Fears Eviction After Four Year Foreclosure Battle With Bank of America

Mike and Jamie Vos always dreamed of buying a home where they would put down roots and raise their children. In 2008, they found a house that seemed perfect — a two-story house on a quiet street in Buckley, Washington. For the first time their daughter, Autumn, then 5, and their son Cameron, then 11, would have their own bedrooms.

The Vos bought the house and regularly made their mortgage payments. But in early 2009 while the national economy was entering the worst downturn since the Great Depression, the family saw financial trouble looming and decided seek a loan modification in order to lower their monthly payments. They were turned down.

The Vos said that’s when they sought advice from Bank of America, the bank that was servicing their loan.

Mike Vos said that he remembers the conversation well: “They (Bank of America) said, We can’t tell you to do this, we’re just giving you information on it. If you don’t make a payment for three months, it will show that you are in distress and you’ll be put at the top of the order to be able to be helped.”

After hearing that advice, the Vos said they stopped making payments, and applied again for a loan modification. They said the process was overwhelming and confusing.

“It was this endless battle, it just seemed like, no matter what we couldn’t win”, Jamie Vos said. “We would send things in 30 times and when they finally did say they got it they would wait so long after that they would say the paperwork had expired and we needed to do it again.”

Jamie Vos said she would be on the phone with the bank for hours, but the next time she called there would be no record of the previous conversation.

On June 3, 2010, Bank of America denied their loan modification and the next day foreclosed and took possession of the Vos home.

The Vos said they pleaded with Bank of America to undo the foreclosure, noting that Mike’s income had improved and they could make their payments. A month later, they received word in an e-mail from Bank of America that the foreclosure sale had been rescinded. But later the bank said the sale was not rescinded and the foreclosure would stand.

Read on.

Foreclosure-Relief Fund Still Has $520 Million Unspent

WASHINGTON—U.S. bank regulators have yet to figure out what to do with about $520 million in unspent money placed in a fund to reimburse consumers for foreclosure-related abuses, a federal watchdog said in a report Thursday.

The findings by the Federal Reserve’s inspector general are the latest outgrowth of regulators’ 2011 decision to order an independent review of banks’ foreclosure practices, in which many bank staffers were processing foreclosure cases without personally verifying their contents. A review by bank regulators later found banks also improperly denied loan assistance to homeowners, made errors in loan-assistance plans and charged improper fees.

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Citigroup Hopes to Finally Close Chapter on Subprime-Lending Venture

Citigroup Inc. C +0.29% ‘s plans to get rid of its U.S. subprime-lending unit, OneMain Financial, will close one of the most complicated and volatile chapters in the bank’s history.

The business of charging high interest rates to low-income customers, who often couldn’t get loans elsewhere, was once hailed as a core part of the financial supermarket assembled by former Chief Executive Sanford Weill. But during the financial crisis, it became a money-losing albatross.

The current holder of Mr. Weill’s old job, Michael Corbat, calls OneMain “a terrific business.” But it doesn’t fit “the Citi model,” he says. These days, Citigroup’s consumer business is focused on lending to high-income customers in big cities around the world—a far cry from the U.S. strip malls and blue-collar neighborhoods that host OneMain’s branches.

The split-off of OneMain—through an initial public offering, a sale, or a combination of the two—has ramifications for the industry and the bank. For borrowers, it could be a sign that subprime loans are again becoming a niche product dominated by less-regulated nonbanks. For Citigroup, the yearslong process—its plans to get rid of OneMain date to at least 2009—underscores the challenge it faces as it attempts to slim down and find steadier, less-risky sources of revenue.

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Judge gives Kalamazoo Co. green light to sell woman’s home after property tax mistake

KALAMAZOO COUNTY, Mich. — A Kalamazoo County judge has sided with county officials in a dispute involving a Richland woman’s home being seized over a property tax mistake.

FOX 17 first talked with Deborah Calley in mid-September, when she told us she lost her home after accidentally missing a property tax payment of roughly $2,000 in 2011.   She paid $164,000 in cash for the home in 2010.

Having no mortgage on the home, Calley says she simply forgot to make the payment.  She also says she wasn’t properly notified about it.

“When I paid the taxes in 2012 right there in Richland, no one said, ‘Oh, well you still owe money for 2011,’”Calley said in September. “So, I didn’t really have a clue. I thought I was right on time.”

Kalamazoo County Circuit Court Judge Gary Giguere, Jr.’s ruling coincides with whatcounty officials told FOX 17 from the beginning: that the county was only following the law.

“…the Court finds that the numerous and varied forms of notice the Petitioner used to notify Defendant [Calley] pursuant to the GPTA  [General Property Tax Act] were reasonably calculated to apprise her of the foreclosure proceedings,” Giguere’s court ruling reads.

Other documents obtained by FOX 17 showed that several notices were sent out from the county treasurer’s office over the last year, but Calley said she didn’t see a single one.

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N.Y. Fed Lawyer Says AIG Got Billions Without Paperwork

The Federal Reserve Bank of New York poured billions of dollars into rescuing American International Group Inc. (AIG) in September 2008 without drawing up documents that would cement the government’s control of the giant insurer, the bank’s lawyer testified.

AIG’s dire condition required an immediate infusion of cash, and paperwork memorializing the terms of the loan wasn’t complete, Thomas Baxter, the New York Fed’s general counsel, told a judge inWashington yesterday in a trial over a shareholder challenge to the terms of the rescue.

The Fed wanted to quickly get control of AIG because of concern that Rodgin Cohen, an attorney for the company, might try to re-negotiate the rescue terms, Baxter said. Cohen had succeeded in re-working the terms of JPMorgan Chase & Co. (JPM)’s takeover of Bear Stearns and the Fed was worried that he might try again with AIG, Baxter testified.

“The more credit we put into AIG, the less bargaining power we had,” Baxter said.

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